Authentic, hand-crafted artisanal blog posts on economics and other stuff. Warning: May contain traces of nuts.
This week we lost another of the 20th Century's greatest economists, Robert Lucas. Lucas won the Nobel Prize in 1995, "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy". If anything, that radically understates the contribution of Lucas to the study of macroeconomics, and to economics more generally.
Lucas will become familiar to my ECONS101 students in the next couple of weeks, or rather his critique of the Phillips Curve will become familiar to them. Now, we might quibble about the 'rational' part of rational expectations theory, but regardless the addition of explicit consideration of expectations led to a revolution in macroeconomic modelling. The importance of that contribution, along with the many other changes that Lucas brought about in the way that economists think about an model the macroecono